Rodovia das Colinas is preparing to sell BRL850m ($427m) in Brazil’s domestic bond market, according to a prospectus. A 2020 tranche would pay the DI plus up to 3.0%, a 2020 inflation linked tranche up to 7.5% and a 2023 inflation-linked tranche up to 8.0%. The exact size of each portion is to be determined during the bookbuilding process, in which the deal may be upsized to as much as BRL1.15bn. A roadshow is scheduled to begin March 12, with bookbuilding running from April 9 to April 25.The operator of toll roads in Sao Paulo state is raising funds to repay debt. BTG Pactual, Bradesco, Itau and Santander are managing the sale. The debentures have not yet been rated.
Category: Bonds
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Sempra Adjusts MXP Timing
Sempra Mexico is looking at next week for a MXP5.2bn ($412m) sale in Mexico’s domestic bond market, after deciding to extend the investor meeting period, according to people following the process. The Mexican unit of US-based Sempra Energy had been targeting a sale as soon as today, and now expects to price as soon as February 12. The issuer is able to choose among a 2018 tranche paying a spread to the TIIE and a 2023 fixed-rate tranche. CFE and Pemex are likely pricing reference points, with the deal expected to offer a pickup to the two government-owned entities. Deutsche Bank, Credit Suisse and Santander are managing the transaction, rated AAA/Aaa on a national scale. In October, Sempra Mexico won a 25-year contract to build and operate a pair of gas pipelines in the state of Sonora, which should require a $1bn investment including proceeds from the bond sale, according to ratings agency reports. Sempra operates five gas pipelines and a regasification terminal in Mexico, and derives about 60% of its revenues from CFE contracts.
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Argentina Auto Lender Preps Local Issue
GPAT has been approved by its board to issue up to ARP250m ($50m) in Argentina’s domestic bond markets. The auto lender will look to issue a 1.5-year bond, in addition to 9-month paper, according to people familiar with the company’s plans. The company will look to issue in March or April, with funds headed to buy new cars from General Motors Argentina. The capital markets arm of Banco Patagonia, GPAT’s parent company, will lead the deal. GPAT last issued under similar terms in January. It has a global program of up to ARP800m, which was upsized to ARP1.5bn in May.
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Bladex Eyes DCM Visit
Bladex could look to the 144A/RegS market or Mexican domestic bond market during the second half of this year, according to officials at the company. The Panama-based supranational bank could find tenors under five years especially attractive, with a $200m-$500m sale likely. During the first half of the year, it plans to focus on short-term funds, considering the possibility of 3-month paper.
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Bottler Plans MXP Bond
Arca Continental is planning a bond sale in Mexico’s domestic market, according to a prospectus. The bottler has yet to determine the exact size of the sale, which includes the option of both 2018 TIIE-linked and 2023 fixed-rate notes. It has indicated a March 21 estimated pricing date, and expects to use the proceeds for working capital. BBVA, HSBC and Santander are managing. Arca Continental is rated AAA on a national scale.
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Cemex Indicates LM Targets
Cemex is considering exchanging its convertible bonds due 2015, 2016 and 2018 for longer-dated ones, it says. The Mexican cement maker plans to let shareholders vote on the matter March 21. It did not give an indication of the new maturity it would target. After heavy activity last year in the DCM, Cemex expects to focus on organic growth in 2013, officials have said, to be complemented by liability management when conditions are appropriate. The 4.875% 2015 bonds were issued in 2010 and the 3.25% 2016s and 3.75% 2018s were sold in 2011, all to fulfill obligations under the 2009 financing agreement.
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Costar Looks for April-May Issuance
Costa Rica remains on track for a $1bn bond issue, that should come in “April or May” of this year, its finance minister Edgar Ayales tells LatinFinance. An additional $1bn billion should be raised in 2014. Proceeds will be used to finance the country’s fiscal deficit, which reached 4.4% of GDP in 2012. Deutsche Bank and Citi, managers on a $1bn November bond, are advising. Ayales says a top priority of the government is reining in the deficit through a fiscal reform, which the administration hopes to push through next year. “Investors are monitoring our fiscal reform very carefully. We know we have to do something soon or the market might penalize us,” he says. The November transaction marked the sovereign’s return to the international capital markets after an eight year absence. The 2022 got $4bn in demand and a 4.25% yield. Costa Rica is rated Baa3/BB+/BB.
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GeoPark Drills Into Bond Market
Sound issuing conditions appeared to prevail in the bond market to start the week, with GeoPark Latin America generating $2bn in orders for a $300m sale that marked its first 144a transaction. The 2020 NC4 priced at 99.332 with a 7.500% coupon, to yield 7.625%, tight to 7.625%-7.750% guidance revised from 7.750%-8.000%. The bonds were trading up 1 point in the grey late Monday, according to investors. The B/B independent oil and gas exploration and production company with operations in Chile, Colombia and Argentina was somewhat difficult to comp, given the lack of single B oil and gas credits in the region. The managers on the sale were heard looking at main comps outside of Latin America such as Africa’s Afren (B/B), which had 2019 bonds trading at 5.0%, as well as regional single Bs like OGX and Pacific Rubiales. The order book was well diversified with strong participation from Chilean and US accounts, notes a person familiar with the sale. GeoPark is raising funds to repay $171m in existing debt, to partially fund its 2013 capital expenditures and for possible new acquisitions. The bonds are secured by a pledge of approximately 80% of the shares of the GeoPark Chile and GeoPark Colombia operating companies and by a pledge on inter-company loans granted by the issuer. Covenants include a limit of gross debt/Ebitda below 2.75x for the first two years and below 2.5x thereafter. Itau, JPMorgan and BTG Pactual led the transaction. GeoPark sold $133m in 2015 bonds in a more limited RegS-only sale in 2010. While GeoPark has exploration and production interest in 19 blocks in Chile, Colombia and Argentina, the current net production of approximately 95% of its production is concentrated in four fields in Chile and Colombia, according to Fitch. Limited diversification exposes the company to operational as well as economical risks associated with small small-scale oil and gas production, the agency says, noting that free cash flow is expected to remain negative during the
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Gol to Meet Buyside
Gol Linhas Aereas Inteligentes is scheduled to see debt investors beginning today, in meetings that will test the buyside’s appetite for the B/B+ Brazilian issuer nearly one year after it postponed a $100m minimum perpetual NC3 bond. Calling it a “non-deal” roadshow, the airline will visit in New York, London, Santiago, Boston and the US West Coast and finish on Wednesday. A dollar transaction may follow, market conditions permitting. Banco do Brasil, Bank of America Merrill Lynch, Bradesco and Citi have been mandated. The airline was last in the bond market in 2010, pricing a $300m 10-year to yield 9.50%, through BAML, Citi and Itau. Those bonds were trading to yield 9.73% late Monday. Gol is also preparing the IPO of its Smiles mileage reward program, with the board meeting to discuss the matter Friday. Gol met investors in Europe and Asia in February last year, whispering 11.5%-area via JPMorgan before deciding against a sale.
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SMU Shops for 7% Handle
Chile’s Grupo SMU is out with high-7% to 8% initial price talk for what is expected to be a $300m senior unsecured 2020 NC4 bond sale, according to people familiar with the process. The B2/B borrower is expected to price as soon as today. Ba2/BB minus Peruvian retailer Maestro’s 2019 NC4 and Baa3/BBB minus Chilean supermarket operator Cencosud are seen as providing reference points. The notes are guaranteed by the four main operating entities of SMU which collectively represent 95% of consolidated Ebitda and 93% of SMU’s consolidated total assets. Proceeds will be used to refinance existing debt including syndicated loans and credit lines and to extend SMU’s maturity profile. BTG Pactual and Deutsche Bank are managing the sale. Though the issuer has used Chile’s local bond market, a sale would represent an international debut, according to Dealogic data.